This is the 1^st project assigned to your team. Your team is required to help clients to form and implement the strategy in constructing and managing a portfolio to achieve the specified objectives.

Portfolio Objectives

• Adjust portfolio to a low risk, low duration exposure.

Current holdings Face Value (AUD)

Cash 90,000,000 Bank bills 30 days 0 60 days 0 90 days 10,000,000 120 days 33,000,000 150 days 0 180 days 0 Bonds

T.Bond		Amount
CGS 5.75% 15.07.2022
CGS 2.75% 21.04.2024		22,000,000
CGS 4.25% 21.04.2026		30,000,000
CGS 2.25% 21.05.2028		25,000,000
CGS 2.50% 21.05.2030		40,000,000
CGS 4.50% 21.04.2033		50,000,000
CGS 3.75% 21.04.2037		50,000,000

You may buy or sell any other of the money market securities or CGS listed that you need to achieve your objectives, but you must NOT issue debt to fund any acquisitions.

Short selling is NOT allowed. That is, you cannot sell any vehicle you do not have in your books. If at the end of the session you have an overall short position of more than 1 million AUD face value you will lose 1 mark.

Deal size is limited to a minimum of 1 million and a maximum of 20 million.

Project1: Money Market Trading Simulation TASK OVERVIEWIn this week, your team is invited to help clients to form and implement the strategy in constructing and managing a fixed-income portfolio to achieve the specified objectives. At the end of project, your team needs to provide a report and present to clients management, covering following topics

1.Explain your trading strategy to achieve the portfolio objectives.

2.Explain the transactions you made, including:-Are you a price maker or price taker?

-How did you decide or choose the quotation for your trading?

-What are the key learnings in executing your trading strategy?

3. Analyze the profit and loss of your trading